What Big Labor Wants

Every four years, pundits look forward to Labor Day as the launch of the “real” election season. This year, it’s especially appropriate, since organized labor is going all-out to influence not only the November outcome, but policy into the next president’s term. With the Democrats’ control of Congress likely to continue, and possibly expand, and the presidential contest a toss-up at this writing, it is worth asking: What does Big Labor want?

At the top of the unions’ policy agenda is the misleadingly named Employee Free Choice Act (EFCA), which would mandate an organizing method known as “card check” whenever a union requests it.

Facing a decades-old private-sector membership decline, unions have sought other organizing strategies, and card check has been among the most effective. Card check circumvents secret ballot elections by requiring only that a majority of employees sign union cards for a workplace to become unionized. Employees are often urged to sign cards publicly and in the presence of union organizers, which exposes them to high-pressure tactics which the secret ballot is designed to avoid.

Were federal law to establish card check as union’s chief organizing tactic, Big Labor would find it easier to corral new members who might be reluctant or unwilling, but would no longer enjoy the privacy of the voting booth.

So what would their dues money gain these thousands of new union members? An unfolding corruption scandal and a look at the state of union pension funds don’t paint a promising picture.

THIS MONTH, Tyrone Freeman, the head of California’s largest union local, was forced to resign amid mounting allegations of misuse of members’ union dues — including, reports the Los Angeles Times, “nearly $300,000 last year on a Four Seasons Resorts golf tournament, a Beverly Hills cigar club, restaurants such as Morton’s steakhouse and a consulting contract with the William Morris Agency, the Hollywood talent shop, records show.”

The local union, based in Los Angeles, is affiliated with the 2 million-member Service Employees International Union (SEIU), one of the most powerful unions in the United States and one of the most aggressive in organizing private sector workers.

The Times‘ investigation relied in part on “the union’s U.S. Labor Department filings,” which, as a result of improved reporting requirements, are available online at UnionReports.gov. This site allows individual union members to see how union officials are spending their dues money — without having to ask the union officials themselves.

The AFL-CIO loudly opposed the Labor Department’s new reporting requirements, which in reality were a long-overdue overhaul to a dysfunctional system. Under the old reporting requirements (filed in form LM-2), unions could report literally millions of dollars in expenses under such meaningless descriptions as “sundry expenses.”

Expect a union-friendly Congress to help labor bosses return to the financial opacity they so fiercely defended — and which could allow the likes of Tyrone Freeman carry on their spendthrift ways.

Finally, new union members should consider their retirement security. In recent years, many labor unions have sought to leverage their pension funds to push for policy goals at public companies’ shareholder meetings, which may have nothing to do with union members’ interests.

For example, the SEIU and UNITE-HERE, the textile and hospitality union, have joined with environmental activist groups to pressure corporate America to adopt policies to reduce their “carbon footprint” — their amount of emissions of carbon dioxide and other greenhouse gases.

JOINING WITH environmentalists is now an established union tactic. Labor unions increasingly rely on their allies to attack a targeted company’s record on “sweatshop” labor, environmental pollution, and other issues, thus obscuring the union’s self-interested motive in gaining economic concessions from the company.

Now, it appears that unions are leveraging their pension funds to push companies to adopt policies favored by green activists — even when they don’t benefit the unions’ own members, who bear the cost of such activism.

Today, most union pension plans are funded at levels much below those of pension plans provided by private employers, according to a recent Hudson Institute study.

“Union-negotiated pension schemes consistently maintain dangerously low ratios of assets to liabilities,” notes Diana Furchtgott-Roth, the study’s author and former chief economist at the U.S. Department of Labor. “Although nearly 90 percent of non-union funds had at least 80 percent of the funds they need, only 60 percent of union plans were at or above that mark.”

Compared to pension plans for rank-and-file employees, the pensions funds for union officers and staff were in much better shape — which undermines the argument that lower pension fund values could be explained by weaknesses in the economy or the stock market. “The success of the officers’ funds shows the heads of the national organization know how to properly fund a pension plan if they choose to,” explains Furchtgott-Roth.

But apparently many union officials choose to pursue activism in causes that don’t directly benefit their members, instead. Corralling in new members would allow this Ponzi scheme-like arrangement to continue, feeding money into underperforming pension funds.

So, to answer our original question, Big Labor wants more members and more dues money to spend on politics — and it wants Uncle Sam’s help in getting them.